Last year had its fair share of surprises. It started with a Hollywood slap and ended with a Romanian police raid tipped off by a pizza box and a Greta Thunberg tweet. But in-between this WTF sandwich was a bigger story unfolding across Australia’s property market: prices were falling.
Eight straight interest rate hikes coupled with a cost-of-living crisis culminating in a $7.50 sausage roll being considered ‘the new normal’ led many potential buyers to rethink their plans. In Sydney, house and unit values dropped 12.1% last year, more than double the 5.3% average national slump. In some suburbs the decline was much steeper at over 25%. Even so, median prices remained upwards of 8% higher than pre-Covid levels, demonstrating just how high values soared during the pandemic.
But according to data just released in CoreLogic’s annual Best of the Best report, it looks like Sydney copped the brunt of the boom-doom, with all 10 of the largest value drops in the country taking place in this city. Finally, Melbourne might actually have something on us, with Sydney’s northern beaches, city and inner south, and eastern suburbs regions dominating 2022’s list for largest house and unit value declines.
Coming in at numero uno is Narrabeen, on the Northern Beaches, which saw an annual drop of -26.8%, ending the year with a median of $2,592,772. Fewer high-end sales likely skewed the coastal suburb’s median house value, where prices were down 20% off the back of a 40% increase during the boom. Though one of the most popular sea-change picks during the pandemic, Narrabeen has corrected as people return to the city, offices, and a post-covid reality.
Sydney’s uber trendy inner-city suburb of Surry Hills followed close behind, recording a -25.4% decline in value, with the median house price now sitting at $1,789,868. In nearby Redfern, which over the past decade has experienced a transition from student-heavy-suburb to young-professional-playground, values dropped a similar -25.4%. In Birchgrove, an affluent suburb on the water in Sydney’s Inner West, median house prices dropped -24.4% over 12 months, with the median now clocking in at $2,643,555.
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Sandwiched between Alexandria and Eastlakes, the industrial-turned-residential suburb of Rosebery took a similar hit, shaving -22.9% off its house value. But perhaps most unexpected to find on the list of worst performers is Waverley, an exclusive Eastern Suburbs neighbourhood next to Bronte, which experienced a -22.7% drop, despite being home to the best meatball sandwich in the state (shout out Frank’s Deli). That being said, median values post-drop still come in at around $3,153,262, so they’ll survive…just.
Rounding out the top 10 is Newtown, Darlington, and Chippendale, recording drops of -22.6% and -22.5% respectively. Due to higher concentrations of investment activity, markets in Sydney’s inner-city suburbs tended to be more volatile last year. As we return to the city (and the new normal of $7.50 sausage rolls), investors and renters are predicted to alter this trajectory in 2023.
